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Was Japan’s so-far disastrous nationalization of the Senkaku/Diaoyu islands a “miscalculation” of

Map of the world with China-Japan-South Korea participating in trilateral meeting are highlighted in PR China , Japan , and South Korea . (Photo credit: Wikipedia)

China’s likely response, or was it a deliberate, desperate, almost kamikaze-like lunge to save the U.S.-Japan security alliance?

I believe that it was the latter. That Japan—and here I mean not just the Japan Democratic Party (DPJ) Noda cabinet, but also the ministry of foreign affairs (MOFA) and self-defense forces (SDF) bureaucracies, and, particularly, the factions within the main opposition Liberal Democratic Party (DPJ) and nationalists allied with former Tokyo major Ishihara Shintaro—did not expect a ferocious response from China, including shows of naval force and threats of occupation, is not credible.

On June 6, Japan’s ambassador to China, Niwa Uichiro, went public in the Financial Times, warning that the nationalization would be spark an “extremely grave crisis” in relations, causing “decades of past effort to be brought to nothing.” Niwa, a former CEO and Chairman of Itochu Corporation, certainly had been raising the alarm in even starker terms internally to the Noda cabinet and the MOFA, as well as to Japan’s politically powerful big business establishment.

And there was not the least ambiguity or diffidence in China’s position, stated publicly and through diplomatic channels over the past several years, including the day before the September 12 nationalization decision when Hu Jintao and Noda stood face-to-face on the fringe of the APEC meeting in Vladivostok.

That the ensuing crisis would be particularly destabilizing and dangerously unpredictable in its ultimate costs to Japan was ensured by the contemporaneous decennial leadership change in China, extending throughout both the Communist Party and the People’s Liberation Army, of which only the vaguest picture is being revealed in the 18th Party Congress which begins today, November 8, in Beijing.

The nationalization decision has so far fueled an explosion of anti-Japan sentiment, demonstrations like the one I witnessed in Shanghai, wide-spread vandalism against Japanese businesses, and popular boycott of purchases of Japanese products, particularly automobiles. Officially directed anti-Japanese actions have included stalled customs clearances, cancelled or deferred commercial contract negotiations, cancelled exhibitions and delegation exchanges.

Japan’s auto industry has been the most damaged, particularly Nissan for which the China market accounted for 26% of total global vehicle unit sales in FY 2011, and Honda which sold 20% of its cars in China (the figure for Toyota is 12%). Nissan’s Chief Operating Officer on November 6 that this fiscal years’ operating profit forecast was being cut by JPY 60 billion (USD 750 million) because of a drop in China sales. It could get worse.

But what is more worrisome that the impact on any specific industries, is the inherent intractability of a territorial issue like Senkaku/Diaoyu between two countries once the issue is inflamed, and the longer term obstacles this creates for continued integration of Japan’s economy with that of Asia’s other major power, China, an imperative for Japan’s future growth and prosperity. As tensions and the frequency of dueling Coast Guard patrols in the Senkaku/Diaoyu area have increased, so have combative diplomatic exchanges, slights and insults, and—on both sides—a torrent of books and articles whose themes recall the nightmarish era of Japan-China war.

What could, from Japan’s perspective, possibly have justified and motivated such a hugely costly and dangerous course?

The answer I think is fairly clear: it was the course most likely to block and forestall what the prevailing conservative establishment sees as a greater threat: That the U.S. and China have been moving toward a new, shared East Asian power paradigm in which the U.S.-Japan defense alliance is abandoned and Japan is forced to defend itself alone or to abandon defense and rely on “soft power” to defend its interests.

As I have presented in this blog before, reviewing recent books by Australian strategist Hugh White (see my post) and Professor Yabuki Susumu (here), the interests of both China and, particularly, the U.S. are now clearly to forge such a “new strategic architecture” in Asia. What Professor White points out in The China Choice: Why America Should Share Power is an agreement between the U.S. and China to share power would require that the U.S. decouple its military resources from Japan’s, ending the alliance. He correctly states that Japan, of all the affected countries, will find the new order the most unwelcome and difficult to accommodate.

Japan’s Senkaku/Diaoyu island nationalization gambit eloquently speaks to this difficulty, and the lengths to which Japan may think it must go to keep the U.S. engaged in supporting the alliance against a “China threat.” Of course, there is a huge vested interest in the U.S. Department of Defense in maintaining the status quo, expressed inter alia through studies like the CSIS Armitage-Nye report.

This week the SDF and U.S. Navy and Air Force launched a massive 16-day joint exercise off the southern islands of Kyushu and Okinawa involving 47,000 men (10,000 Americans), 30 ships, a U.S. carrier, and 240 aircraft. The exercise is simulating an attack on Japan’s islands from an “unknown power,” but the unspoken target is clear.

The problem with this, as Professor Yabuki has written, is that the U.S.-Japan “alliance” has lost any positive relevance for Japan’s security, and in fact is inimical to Japan’s interests. Could there be any more eloquent testimony to this reality than consequences of the Senkaku/Diaoyu crisis? Nor, for reasons presented clearly by Professor White, is the alliance in the U.S.’s long term interest.

What we have witnessed in this dispute is a historical mistake and tragedy. But history is moving on, and is likely to accelerate following Obama’s re-election and the China’s 18th Party Congress. Japan is going to have to accept that its world has changed.